Finland Market Opportunities
MFA: Strategic opportunities for foreign exporters
The Finnish economy survived the first year of the pandemic better than most other EU member states. The reason was mainly minimal trade restrictions, massive digitalization of the company, a specific system of temporary layoffs or less dependence on tourism. Growth in 2021 will be driven by private consumption and public and private investments, mainly in the area of green transformation, infrastructure and innovation. The unfavorable development of the European and world economy affected Finnish exports, which fell by approx. 11% year-on-year.
Finland continues to face some chronic problems (e.g. long-term low growth potential of around 1.5%, low labor productivity, difficult sustainability of public finances, insufficient investment, inefficient labor market), which the pandemic has only exacerbated. Increased pressure on export-oriented industry, as well as increasingly difficult to sustain public finances, will clearly be an opportunity for foreign competition, which is able to offer a better ratio of quality and price, even in sectors that are difficult for it to access today.
The government has so far allocated approx. 3.47% of GDP to support the economy, approx. 3.11% of GDP has been used up, and further measures are being prepared. The aid was aimed at compensating companies’ fixed costs (0.12% of GDP), direct support of municipalities (1.26% of GDP), strengthening regional competitiveness and sustainable development (0.14% of GDP), financing innovation (0.44% of GDP), loans and guarantees to companies and share issues (0.95% of GDP), unemployment support for entrepreneurs (0.07% of GDP), support for the self-employed (0.04% of GDP), assistance to companies operating in the hospitality industry (0.06% of GDP) etc.
The basic criterion for compensation was a reduction in turnover due to the pandemic by at least 30%, or business in a sector where there was a total decrease of at least 10%. The Central Bank also contributed to the recovery by purchasing state and corporate bonds for EUR 11 billion and providing favorable loans to commercial banks in the amount of EUR 16 billion. Finland will receive approx. EUR billion from the European Recovery Fund (NGEU) and transfer approx. EUR billion to it.
As part of the so-called Finnish Sustainable Growth Program, it wants to finance four main priorities from this fund: green transformation, digitization, employment and qualifications, and social and health services, while the horizontal priorities are science, research and competitiveness.
According to allcountrylist, Finland still wants to achieve the ambitious goal of carbon neutrality by 2035 and a completely carbon-free economy by 2050. One of the denominators of the Finnish government’s plans for post-pandemic economic recovery is the strengthening of efforts for a green transformation, which, among other things, requires a fundamental change in the energy mix.
Already in 2020, 30% of the produced energy came from renewable sources, by 2030 this share is to increase to 50%. We are witnessing a boom in wind parks and a fundamental increase in the importance of wind energy, which is expected to increase from the current 7% to 17% in the energy mix by 2023 alone, while the total potential is up to 25%.
Massive investments are also being made in the construction of bio-incinerators and biogas stations, recharging stations for electric cars or energy-efficient buildings. Renewable sources in Finland will replace not only coal, but also peat, which is still an important energy source.
In the long term, the country will face an energy deficit estimated at up to 5 GW, which means, among other things, that it must count on nuclear energy in the future as well. While the completion of the Olkiluoto 3 nuclear power plant is nearing completion, the start of the delayed construction of the new Hanhikivi 1 power plant is still being prepared and is an opportunity for various types of subcontracting.
An interesting area and opportunity soon will also be small modular reactors, which are likely to find wider use in heat supply. Finland also recently has great ambitions in the area of production and use of blue and green hydrogen, both in the field of energy and in the field of mobile fuel cells within electromobility.
In the field of ICT, as part of Finland’s long-term strong orientation towards digitization across sectors, innovative software solutions are in demand especially for health (healthtech) and social services, education/training (edtech), public administration systems, process management, digitization of municipal services, financial, banking and insurance services (fintech), logistics or optimization of supply chains. There are also opportunities for Czech companies in the dynamically developing game industry.
The market of technologies using the processing of “big data” and the application of artificial intelligence offers new opportunities, for example, in the field of traffic planning, medical diagnostics, the Internet of Things or cyber security, including the protection of personal data.
The area of complex ecological solutions with strong ICT elements (cleantech) will offer a number of new opportunities, especially in the next fifteen years, e.g. in the field of electromobility (automotive and aviation), renewable energy, recycling or energy storage.
Healthcare and pharmaceutical industry
The healthcare and pharmaceutical industry in Finland focuses on the use of state-of-the-art technologies in diagnosis, treatment and patient care. Thanks to this trend, e.g. innovative software solutions, nanotechnology and biotechnology or 3D printing have potential in the field. With regard to the planned construction of several so-called 5G hospitals, however, apart from these high-tech segments, a number of opportunities can also be expected in more traditional areas, such as medical equipment, furniture, infrastructure, etc.
The pandemic has strengthened the already strong trend of online medicine and the involvement of artificial intelligence in diagnostics, which is underlined in Finland by significant geographical distances and demographic developments. One of the oldest populations in Europe is a rather difficult challenge for Finland, but on the other hand it means a number of opportunities for new intelligent solutions, not only in the field of healthcare.
Rail and rail transport
As part of the green transformation, the Finnish government has intensified the modernization and construction of railway and tram lines, which represent significant opportunities for Czech companies as well and are co-financed by private, state and EU money. By the end of 2023, Finland should implement the following projects: high-speed lines between Helsinki and Turku and Helsinki and Tampere, a new urban railway in Espoo, repair and modernization of the railway in the Pasila–Riihimäki section, the Kouvola–Kotka–Hamina line and the development of the Oulu– Laurila–Tornio–Haaparanta.
This year, the second phase of the construction of tram lines in Tampere on the routes Pyynikitori–Santalahti and Santalahti–Lentävänniemi is also scheduled to start. The construction of the so-called “Eastern Railway” between Lentorata, Porvoo and Kouvola is in the advanced project planning phase. Looking forward, the discussion and planning of the so-called “Arctic Railway” with a length of 460 km, which could be put into operation around 2030, continues.